Swaziland ICSID Arbitration Notice Of Dispute For The Expropriation Of Shareholding In Joint Venture
A notice of dispute against Swaziland has been submitted to the King of Swaziland, His Majesty the King Mswati III, as well as his Prime Minister and other Government entities. Brought on behalf of the foreign investor Southern Africa Resources Limited (“SARL”), the Swaziland ICSID arbitration notice alleges that the King´s Representative in a joint venture created an artificial cash crisis by refusing to allow shipments of iron ore, and then used this cash crisis as a pretext to seek the judicial management of the joint venture, rendering the foreign investor´s stakes in the company worthless.
SARL reportedly invested approximately USD 50 million in Swaziland. The investment involved the recycling of iron ore dumps left behind by Anglo American in the 1970´s and the processing of iron ore for export.
The dispute is being brought on the basis of the Swaziland Investment Promotion Act of 2008, although the Notice of Investment Dispute also serves as a notice under the Protocol on Finance and Investment (2006). Swaziland became a Party to the ICSID Convention Convention in 1971.
In terms of arbitration, Swaziland is perhaps best known for the ICC arbitration dispute between MTN and the Swaziland Post and Telecommunications Corporation (SPTC), which resulted in an ICC arbitration finding that SPTC had breached a joint venture agreement. As here, the business in question had a connection with the King of Swaziland, who reportedly owned a 25% stake in the iron ore mining joint venture. The current dispute is believed to be the first investment treaty arbitration against Swaziland.
William Kirtley of Aceris Law LLC is representing the foreign investor whose shareholding was allegedly expropriated.
A copy of the Swaziland ICSID arbitration notice of dispute is available, along with notice of delivery.